Lending personal money to ltd business (short term)

I appreciate this question has already been asked but I’m still unsure.

I run a business in waste management (House clearance) and I’ve got my first job coming up soon. I need to lend my business some money to cover disposal costs until I receive payment from the client. How would I go about doing this? I have paid for the website and all of the other associated costs through my personal account. I have a QuickBooks account which I am planning to use. I understand it’s a directors loan but how would I do this so it’s done properly?

I have paid for the website and all of the other associated costs through my personal account.

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Urgh! In my humble opinion, you've started on a path that can lead to major grief - get off it now.

Your money is not interchangeable with the business' money, in either direction.

Put some money into the business's bank account and record it on your books as a Director's Loan (as advised above). If you need to put more money in, do the same again. When your business makes money, you can decide when to pay back the loan - in stages if you wish - and of course record it on the books, paying down the Director's Loan.

You can of course charge the business interest on your loan, but this should be formally recorded - directors' meeting minutes or similar.

Not an expert, so give more credence to any subsequent posts that indicate a knowledgeable individual.

This whole issue has come about due to the nature of the business. I collect a clients waste and then pay to dispose of it, when the job is complete they’ll pay me for my service. In theory after a couple of jobs I shouldn’t need to be lending personal funds into the business.

I was getting very confused with the tax implications of lending personal funds to a limited company. I am aware that the limited business is a separate entity.

@dotcomdude I think your first suggestion will be the simplest. I am set up on QuickBooks so adding a receipt should be simple, I have incurred other costs such as: Web design and my waste licence. I presume I can follow the same procedure there with the expenses providing I have the relevant receipts / invoices.

I was reading Director Loans can be a way of paying yourself £1000 tax free by charging interest to the company? This is a way of increasing your personal tax free allowance.

@DavidWH , I agree with you although not many customers want to hand over money before the job has been completed. For larger more complex jobs I would but for the majority I’ll collect payment after job completion.

T, I agree with you although not many customers want to hand over money before the job has been completed. For larger more complex jobs I would but for the majority I’ll collect payment after job completion.

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You need to think about protecting the customer deposits... They really should be paid into a separate client account held on trust for the customer unless and until the job is completed.

I am a licensed Insolvency Practitioner with over 16 years experience at www.nevilleco.co.uk and can be contacted on 01752 786800 or [email protected] for further advice. I have produced various advisory videos which can be viewed here: